The study and collection of coins and currency has transformed from hobby into profitable industry. The collecting of rare coins in particular has created enormous value, and the market for buying, selling and trading rare coins has significantly expanded in the preceding 100 years. The American Numismatic Association (ANA), a non-profit corporation supporting the rare coin industry, estimated that the total rare coin market experienced domestic sales approximating $2 billion in 2003 alone. This value was spurred by the ongoing development of uniform standards for evaluating or “grading” the physical condition of the coins. The ANA introduced and later updated descriptive terms for grading coins (e.g., Proof, Uncirculated, About Uncirculated, Extremely Fine, Very Fine, Fine, Very Good, Good, Fair, Poor) so dealers and collectors alike could grade the various condition of any given coin. Likewise, Dr. William H. Sheldon created a standardized numerical scale (from 1 to 70), known as the Sheldon Scale, which is now an accepted standard used to add more objectivity to coin grading (e.g. a coin that is graded a ‘65’ on the Sheldon Scale is in a better condition compared to a coin that is graded as a ‘50’). The basic idea of the Sheldon Scale is that the higher the Sheldon number of a given coin, generally, the greater the value of that coin. While a 100 point grading scale was proposed by numismatist and historian Q. David Bowers, many coin industry insiders rejected the idea, believing that such a system would create confusion and have a detrimental effect on the already-developed industry market. Even with these many positive advancements, however, by the 1970's, the coin market had grown large and chaotic. Coin grading, and thus valuation, which was mostly subjective, varied widely from dealer to dealer, and counterfeit coins were rampant in the marketplace.
Solutions were sought and initiated. The American Numismatic Association Certification Service (ANACS) was created to independently review, authenticate and grade coins for a fee, and this service was tremendously successful. More recently in 1986, the Professional Coin Grading Service (PCGS) was founded, which not only graded and certified coins, but also sealed the coins in tamper-proof plastic holders with interior grading labels displaying the coin and its numeric grade. A year later, another large grading service, the Numismatic Guaranty Corporation (NGC) was started, which performed a service similar to PCGS. The graders of the certification services evaluated coins for the strike, luster and extraneous marks of the coin, and subsequently gave the coin a numeric grade based upon the Sheldon Scale. As mentioned, generally, the higher the numeric grade, the better and, consequently, more valuable the coin. These third-party certification services rapidly became accepted and were extremely popular with the numismatic community, introducing more consistency, transparency, confidence and stability into the coin market. Investors and collectors in the coin market were becoming more confident.
However, as mentioned, while the foregoing certification services graded the “technical” merits of a coin, including a coin's strike, surface condition, luster, and other technical elements of the coin, none of the services adequately addressed the overall appearance/aesthetic attractiveness of a coin, known as the ‘eye appeal’ of the coin, despite the fact that eye appeal is critical to and often adds significant value to a coin. This omission of the eye appeal recognition on the grading labels has led to wide variance between the value of coins within the same numeric grade, creating instability and uncertainty in the grading system and the coin market.
While the coin industry has made attempts to rectify this serious problem, no larger uniform attempt has been made to devise a novel eye appeal standard. To be fair, certification services have attempted to recognize a ‘better’ coin within the same grade (e.g. a ‘65’) by building additional grading points into the official numerical grading number. But the level of value added as an eye appeal sub-grade is unclear from the label on the coin's holder. In a further attempt to give credit to a coin's eye appeal, NGC has used a ‘star’ label system on the plastic holder to credit a coin that has exceedingly beautiful eye appeal as compared to other coins in the same technical grade. Also, on a smaller scale, private dealers also have their particular grading systems to separate great coins from lesser within the same grade: Rick Snow and Brian Wagner (Eagle Eye Photo Seal™), Rick Tomaska (“Everett™” Coin initiative), David Lawrence (multiple star system), have each developed systems to help collectors differentiate the low end, average and extraordinary coins. Most recently, and on a larger scale, the Certified Acceptance Corporation (CAC™) was created and has given the numismatic field a system dedicated to help distinguish between high-end and low-end coins within the same labeled grades. CAC evaluates whether the grade assigned to a coin by a commercial service and has already been placed in a holder or “slabbed” is appropriately graded, in the opinion of CAC. The holders are then either stickered on the outside of the holder to indicate if they are correctly graded (with a green hologram sticker) or over-graded (with a gold hologram sticker) placed on the outside of the coin holder. For some coins, CAC does not place a sticker. This service has been thus far successful, with stickered coins trading for an average of twenty percent premium in the marketplace. Many industry insiders feel, though, that the service's expertise is quite limited to primarily gold coins, and the holder hologram sticker effort is quite accurate in the gold coin series, yet they feel that many non-gold series are not as accurately appraised and graded by CAC (for example, many copper series coins), and this is a shortcoming of the service. Furthermore, CAC does not delineate the specific eye appeal of a given coin, but merely confirms that a technical grade given by the original grading service is high or low.
Others have also contemplated including other information inside of a slab, for example United States Patent Application Publication Number 20070113451, entitled “Collectable Holders” and filed Jun. 30, 2006 teaches “Data about a collectible may include, for example, the collectible's name (e.g., 1884 Morgan Silver Dollar—$1), the collectible's grade (e.g., MS68), the grading company (e.g., ANACS), the date the coin was graded (e.g., Jan. 1, 2005), any type of additional information about the collectible (e.g., the original mintage or print run), the number of collectibles of that same type graded to date (e.g., 103), the number of type of collectibles of that same type graded that same grade (e.g., 10), the specific identification number by the grading company for the collectible (e.g., 345981112), additional specific information by the grading company (e.g., internal category number associated to type of collectible such as 6907.68), and other type of information. Such additional information may include, for example, information that may not be able to be printed on a label because of size concerns. Thus, such information may include an extensive history of the collectible, populations for the collectible in a variety of grades, historic pricing information for the collectible in a variety of grades, information about the encapsulation authority (e.g., ANACS contact information), and information about the components of the holder (e.g., information such as type and version).” Still, to the inventor's knowledge, until the present invention, the element of a coin's eye appeal, as quantified as a labeling element within a formal eye appeal grading system, and recorded within an appropriate holder, has not been adequately accomplished or addressed at this time. Given the fact that so much of a collectable coin's value may be impacted by the eye appeal of the coin, this is a surprising fact that actually teaches away from the present invention described herein.
So the problem in the industry becomes clear: the rare coin grading industry is fragmented, and each service may utilize the same technical numerical grading system, but no coordination exists for the consistant recognition of eye appeal within the industry. While many fine grading services exist, including the aforementioned NGC, PCGS, ANACS, SEGS, IGC and the new Dominion Grading Service (DGS), the problem is that each has its various strong selling points, and each is both weak and strong depending on the various methods they employ, or developments they may have built. But, at the base of the problem, the industry is not coordinated on one of the important elements of true coin value: eye appeal. Not one service offers a truly comprehensive analysis, labeling and monitoring of one of the most important and temporally-transitory elements of coin value: (eye appeal, as mentioned, is directly connected to the monetary value of a coin). Without an accepted and stable system to measure eye appeal, the benefit of trading coins in a ‘sight-unseen” manner, much like a stock is traded, is not practical. The confidence in the coin's true value cannot be quantified by the buyer with confidence. So none of the present efforts to incorporate the important factor of eye appeal into the grading of coins has been made objective, transparent or has yet been standardized. In other words, the aforementioned services do not fairly and systematically quantify the eye appeal of a coin, despite the fact that the ultimate value of a coin hinges on both its technical merit AND eye appeal.
Hence, there is a need for a system and mechanism that can objectively and systematically determine and record the eye appeal of a coin and then easily and clearly convey this eye appeal to coin dealers, collectors, and investors with adjustments over time when necessary. This system would allow coins with higher eye appeal to appropriately trade for a premium price over coins with lower eye appeal and promote certainty in the coin marketplace. The present invention offers viable solutions to the enumerated industry challenges, including novel methods to remedy the issues discussed above, and unify the industry in this regard.